Concerns raised with the charity regulator can lead to the opening of an inquiry. But what should your charity do if it finds itself under investigation?

Finding out that your charity is the subject of an inquiry from the Office of the Scottish Charity Regulator (OSCR) can feel concerning, but the process can be less daunting if you understand the steps that you should follow.

First of all, it’s important to remember that the law requires OSCR to work in a proportionate and targeted way, focusing on the issues most likely to undermine public trust and confidence within the charity sector. It is also important to remember that the opening of an inquiry is not an indication of guilt, negligence or wrongdoing; it is about fact-finding at this stage.

It makes decisions about which complaints to investigate and what steps to take following an assessment made against its remit, risk framework, the credibility of the evidence available and the level of threat to the charity, its assets or the people who benefit from it.

Some cases will come to nothing and the inquiry will be closed. Some may lead to guidance or signposting to sources of help. Some may lead to enforcement action.

Whatever the circumstances, we find that following some simple steps can make a real difference.

Find out the scope of the inquiry

It’s important to understand exactly what OSCR is looking into. Once you know that, you can compile all of the relevant paperwork and records so that they can be shared when required. The key thing is not to panic, and to remember that, however distracting an inquiry can be, that it’s business as usual for your charity while it is ongoing (unless, of course, OSCR has issued a direction to do or not to do something during the inquiry).

Understand the process

OSCR’s role is to get to the bottom of the concerns or allegations which have been raised with it. Inquiries are there to establish facts so that decisions and recommendations can be made. OSCR wants to support good practice. It may well lead to recommendations designed to improve governance, processes or the training of trustees or your senior management team.

Consider what support you need

Sometimes it can help to bring in an external third party - such as a solicitor - to support you through the inquiry. This generally works well as they can guide you through the process and provide a calm, focussed and objective perspective. Charity lawyers who understand the process can help you understand when to challenge or seek clarification from OSCR, guide trustees and ensure all deadlines are met.

What OSCR may investigate

OSCR may begin an inquiry into regulatory matters where:

  • A charity’s assets may be at risk or are not being used for the charity’s stated purposes
  • A person or organisation may be inappropriately profiting from a charity
  • People being supported are at risk of harm
  • A trustee has a conflict of interest which is not being properly managed

OSCR will not investigate matters outwith its remit or jurisdiction (such as matters regulated by the Charity Commission or the Scottish Fundraising Adjudication Panel), nor will it investigate employment or contractual matters. OSCR has made it clear that it will not look into decisions lawfully made by the trustees, just because a complainer does not agree with that decision.

Seeking advice at an early stage can help charities respond appropriately to concerns, engage constructively with OSCR and minimise disruption to the charity as a whole.

At Lindsays, we work with charities and trustees across Scotland to guide them through regulatory inquiries, helping them understand their responsibilities, respond effectively and maintain confidence in their organisation.